The US stock market is trending steadily. With Fed officials in a blackout period ahead of the US FOMC meeting in February, the market has already formed a consensus for a 25 basis point hike. The U.S. stock market is doing well. Although financial institutions were somewhat sluggish in the financial results of US companies, expectations are spreading for a series of favorable financial results of IT companies, especially the Nasdaq index is being bought.
With the risk trend stabilizing, the dollar is slowly selling in the foreign exchange market. The dollar exchange rate is steadily declining, even with some adjustments, as seen in the Tokyo market today. The EUR/USD traded above the 1.09 level on the previous day, the GBP/USD traded above the 1.24 level, and the AUD/USD traded above the 0.70 level today. Under these circumstances, the dollar-yen exchange rate continues to trade at the 130 yen level due to risk appetite’s yen-selling pressure.
In relation to the remark event, as mentioned above, US financial officials have entered a blackout period. European financial officials such as Dutch central bank governor Knot, Croatian central bank governor Vuicic and ECB governor Lagarde are scheduled to speak. Expectations of multiple 50 basis point rate hikes are widespread, and if they are reconfirmed, they are likely to support the euro.
The dollar/yen pair continues to sell. In addition, the preliminary figures for the UK and Europe PMI for January were announced today. It was below 49.0 and the market forecast of 48.8, and the business sentiment fell more than expected, so I bought EURGBP earlier as outlined.